Swiss SFA welcomes agreement on implementation of FATCA in Switzerland

Opalesque Industry Update - The agreement on the implementation of FATCA in Switzerland
was initiated on 3rd December 2012. The Swiss Funds Association SFA (SFA) welcomes the resultant
increase in legal certainty, as well as the reduction in the workload entailed in
implementation.

FATCA entered into force in the US on 18 March 2010, the aim being to ensure that all
accounts held abroad by US taxpayers are taxed. Foreign financial institutions (FFIs) have to
conclude an agreement with the US tax authorities and must undertake to report information on
US accounts. In mid-2012, Switzerland and the US published a joint statement setting out a
framework for possible simplifications in the implementation of FATCA. For example, certain
financial institutions such as social security institutions, pension funds and property insurers
would be exempt. Institutions that are predominantly locally active are to be automatically
deemed FATCA-compliant. The corresponding agreement between the two countries was
initialed yesterday.

Although the text of the agreement will only be published once it has been signed, it can already
be assumed that the solution found will also alleviate certain aspects for the fund industry in
Switzerland. For example, collective investment vehicles in particular will be deemed FATCA-compliant
subject to certain requirements, and will only be subject to a registration obligation.

The agreement also clarifies the exemption regulations for social security and pension
institutions, and thus also for single-investor funds and qualified investor funds (QIFs), which
are reserved for these institutions.

“We welcome the greater legal certainty in an area that is
important for the entire financial sector. We are pleased to note that the workload in
implementing FATCA will be reduced for the financial institutions involved,” said Dr. Matthäus
Den Otter, CEO of the SFA.